How coffee giant Starbucks, poster company for the 'new age' of
employee relations, got itself ground, roasted - and certified - by
the Canadian Auto Workers union.

Source:

BC Business

Date:

07/1997

Subject(s):

Coffeehouses--Labor unions

Citation Information:

(v25 n7) Start Page: p18(8) ISSN: 0829-481X

Author(s):

Blore, Shawn

How coffee giant Starbucks, poster company
for the 'new age' of employee
relations, got itself ground, roasted - and
certified - by the Canadian Auto
Workers union

In a pint-sized Starbucks in the Hornby Street
lawyers' ghetto, a harried looking legal
type in standard issue grey wool glances
at his watch as he places an order for a
double tall latte. If the bright-red bow
tie around his neck constitutes an everyday
act of minor rebellion, then the twenty-something
woman who takes his order is clearly in full
sartorial revolt: cutoff jeans, nose ring,
orange Charlie Brown T-shirt with the characteristic
sigzag stripe, and a baseball cap festooned
with buttons boldly emblazoned with the words
CAW - UNSTRIKE.

It's May 16, 1997 and members of the Canadian
Auto Workers Local 30000 are
engaged in their first job action protesting
the lack of a contract. Out in
Burnaby, picketing workers have shut down
the pastry distribution centre,
stopping delivery of backed goods to Starbucks
stores in the Lower Mainland. Out
on the Hornby Street sidewalk, an off-duty
employee dressed in sandals, shorts
and shades is handing out bright green leaflets
outlining key union demands on
things like wages, seniority and sick leave.
A full-page ad in the pages of The
VancouverSun provides the company's spin
on the dispute: Starbucks's unique work
environment precludes any need for a standard
union contract, according to
Starbucks VP Roly Morris, and anyway, the
employees' wage demands are way too
high. Nonetheless, the company remains committed
to the collective bargaining
process.

In the wider world, industry watchers and
academics are lining up with their
own pet theories as to what could have pushed
a company with a continent-wide
reputation for progressive 'new economy'
employee relations into an
old-fashioned labor dispute. Aggressive union
bosses looking for a foothold in
the service economy is the theory favored
by the Canadian Restaurant and Food
Services Association, which fears union expansion
into its own ranks. A
generation of economically disenfranchised
youth looking for a bigger share of
the recovery pie, say the labor historians,
who always seem to favor the
workers. T-shirts, says Laurie Bonang, as
she hands out another green CAW flier
to a passing customer. To be exact, white
cotton T-shirts, emblazoned with the
Starbucks corporate mermaid, and, until last
summer, worn every Friday on casual
day. 'When they took away our casual Fridays
and said no more T-shirts, that was
it,' says Bonang. 'That was like the last
ray of sunshine in my life and they
took it away. Something had to change.'

A 23-year-old ex-Albertan, Bonang is one
of the key participants in the drive
to organize the Seattle-headquartered coffee
giant. It's something she never
would have imagined doing only a couple of
years ago. "When I started working at
Starbucks it was great," says Bonang. "Great
benefits, great coffee, great
working environment. They actually cared
about me. I really bought into
that."

That was in 1995. Bonang had arrived in Vancouver
after a stint in the
theatre production program at Alberta's Red
Deer College. A subsequent bit of
real world experience convinced her that
theatre production, while occasionally
lucrative, was also a very uncertain way
to make a living. "I did it for awhile
to pay off some of my student loans," says
Bonang, "but I realized I couldn't
handle the way you have to work like a dog
for a really long while, and then you
do nothing for awhile. I didn't like that.
I wanted a steady job, with a steady
income."

Her arrival in Vancouver coincided with the
ongoing expansion in British
Columbia of the Seattle success story, Starbucks.
Tapping into the aging baby
boomers' increasing willingness to pay top
dollar for quality and service,
Starbucks took a relatively simple idea -
high-quality coffee served in small
street-front shops - and parlayed it into
a worldwide coffee empire with nearly
700 stores and sales in the $600-million
range.

Bonang applied at the Homby Street store
and got a job as a barista, the
trendy Latin American name given to Starbucks
coffee makers. Her starting wage
was $6.75 an hour, 50 cents an hour over
minimum wage. If it wasn't quite what
she had expected when she began college,
it was a steady living. Just.

Working hours varied from 15 to 45 hours
a week, depending on demand.
Bonang's monthly income (before tax) averaged
around $1,200. Just under $400 of
that went for her share of the rent in a
two-bedroom east side apartment. A few
hundred more went for food and clothing,
and some more after that for a bus pass
and utilities. Savings were next to non-existent.
Her co-workers were in similar
situations: twenty-somethings, many with
university degrees, stalled in the
workforce by the same demographic bulge that
provides the bulk of the Starbucks
clientele.

The company seemed to recognize that its
workers weren't just teenagers
looking for pocket money. Indeed, Starbucks's
reputation for progressive
employee relations was based on the fact
that it offered its Gen-X workers
grown-up benefits like dental, vision and
particularly important in the U.S. -
health care. Starbucks was also one of the
few service companies to offer its
workers stock options and a stock purchase
plan, benefits hitherto reserved
largely for the professional class.

The benefits were given in recognition of
the fact that in a high-tech
high-touch world, the personnel providing
the service are as important an
ingredient in the company's success as the
quality of the beans. As a token of
their importance, Starbucks referred to its
people not as employees but as
'partners'.

As Bonang's Starbucks career entered its
second year, however, she began to
note signs - some relatively minor, some
less so - that her 'partnership' was
perhaps only token. For one thing, the benefits
package wasn't turning out to be
that much of a boon. "If you ask them, most
people will take a cut in benefits
for a better wage. Ask anyone. I mean, the
medical coverage is a nice gesture,
and it's appreciated, but most of us aren't
really at the stage where we need a
lot of operations or anything." As for the
stock program, says Bonang, "I
personally got 56 shares worth $33 [each],
and after a year I can cash in 20 per
cent of that, at whatever level it happens
to be trading at. So thank you, but
I'd much rather have that money now when
I can use it to buy stuff I really
need, like food."

She also noticed that some of the Starbucks
rhetoric about contributing to
the community seemed to be just that: rhetoric.
"They're celebrating their
10-year anniversary doing business in B.C.,"
says Bonang, "so they gave $10,000
to Children's Hospital, which is all very
nice, but they took out a full-page ad
in the Sun and Province to tell everyone
about it. Do you have any idea how much
a full-page ad in the paper costs? About
$20,000, I bet." ($22,000, actually, if
it's a color ad on a weekend.)

More seriously - to Bonang a least - the
company began recruiting managers
for its rapidly expanding store base from
outside the ranks of experienced
baristas. Bonang, who was by this point a
shift supervisor but not - as she
seems to have hoped - a manager, was obliged
to train and then take orders from
management 'partners' who had never actually
served in the ranks of the true
latte steamers.

More seriously for the baristas as a whole,
in the spring of 1996 Starbucks
unilaterally rolled back the wage scale.
The previous October - concurrent with
the raising of the B.C. minimum wage to $7
- Starbucks had sent letters to all
employees announcing an across the board
increase of 50 cents an hour. New hires
would start at $7.50. Less than six months
later, the company dropped the
starting wage back to the $7 minimum wage
mark.

Starbucks's 'partners' - new and old - discovered
the situation only by
chatting amongst themselves. No explanation
was given for the move, possibly
because it would be difficult for a company
with profits in 1996 of $42.1
million, with plans to double in size to
2,000 stores by the year 2000, to plead
a need for austerity.

A few months after wages had been rolled
back the company began implementing
a new computerized scheduling program. The
new system had been developed at head
office and installed in every store in the
chain. "The manager used to go into
the back for an hour and figure out everyone's
shifts for the week," says
Bonang. "Now he plugs your availability and
rating [from one to 10] into the
system and it spits out a schedule." Starbucks
won't comment about the
programming details of its system, but according
to Bonang, it was clearly set
up to favor the newer- and therefore cheaper
- baristas. "People who had been
there four years suddenly found themselves
with 20 hours a week. That's not
fair."

And then there were the T-shirts and the
end of casual Fridays. This was
perhaps the most minor thing of all, except
when you consider who Starbucks's
'partners' are. Though they schlep lattes
for a living and live on the east
side, Starbucks employees, many with a post-secondary
education, most with
middle-class parents, seem to consider themselves
honorary members of the middle
class. Like lawyers and software engineers
they have stock options, health
plans, RRSPs and dress-down Fridays. If the
first three were proving to be of
nominal benefit, taking away the fourth sent
a clear message: you are not middle
class. You are not like the professionals
who come in to buy coffee every day.
You are not partners. You are workers.

So, like workers, Bonang and her fellow baristas
began to think of organizing
a union.

Joining a union was not the first choice
of action. Bonang considered moving
on, but rejected it. "In reality where else
am I going to go? I'm going to get a
job somewhere like Starbucks, but I won't
have as much authority. as I have
here, and I'll be making even less money.
Is that any better?" She also
considered taking her concerns to the company.
A friendly manager warned her
that that was a good way to end her Starbucks
career.

So late in August 1996 Bonang and co-worker
Steven Emery. went to the Labour
Relations Board (LRB) office to find out
how to form a union. Inside the LRB
they ran into an organizer from the Canadian
Auto Workers, who clearly knew a
good thing when he saw one. The service sector-
and particularly small
businesses within that sector - has been
growing increasingly attractive to
industrial unions in the past decade. The
CAW itself has organized about 35,000
new workers in the past 10 years, about half
in the service sector. It is now
Canada's largest private sector union, with
more than 205,000 members.

Nor is the CAW the only union interested
in smaller service sector companies.
Figures from the BC Labour Relations Board
show that of the 421 new union
certifications that took place in B.C. last
year, 51 per cent occurred in
workplaces with 10 or fewer employees, and
a further 22.5 per cent took place in
shops with between 10 and 20 employees. Fully
60 per cent of all new workers
certified were in the service sector.

Industrial unions have organized in the most
unlikely places: 19 clerks at
the Rogers Video store in Abbotsford are
now members of the International
Brotherhood of Electrical Workers; 13 employees
of Lenscrafters in Victoria now
pay dues to the United Steelworkers of America;
and the solitary jewelry helper
at Collins of Kerrisdale is now a proud member
of the Service Employees
International, Local 244.

According to BC Federation of Labor spokesman
Bill Tieleman, this is but a
taste of things to come. "The small business
community has said repeatedly and
for many years that they are the engine of
the economy and they're creating all
the jobs. Now they seem to be surprised when
unions show up in the engine room.
They shouldn't be. That's where the jobs
are being created and that's where
workers are calling for the services of a
union."

CAW organizer John Bowman set up a secret
meeting with Bonang and her nine
coworkers at the Hotel Vancouver, where he
explained the benefits of belonging
to his union. The pitch was obviously convincing
- all 10 baristas at Bonang's
Hornby Street store signed union cards. In
the days that followed the organizing
drive spread to Starbucks stores on Denman
and Robson Streets and Commercial
Drive. The pastry distribution centre in
Burnaby signed on.

To keep the drive moving, Starbucks's new
CAW members were sent into nonunion
stores disguised as job applicants, with
orders to leave copies of the proposed
collective agreement lying around in the
employee lounge where fellow baristas
might see it and join the drive.

Twenty-nine-year-old Liz Cart heard about
the union drive through the media
and contacted the CAW directly. A graduate
of Carleton University's Soviet
Studies program, Cart says she too was motivated
by a growing disillusionment
with the company. "At the beginning there
were some things that really impressed
me, like the same sex medical benefits. At
the time not even the federal
government offered that," says Cart. "Then
some unilateral decisions were made -
like rolling back wages and changing insurance
carriers- and I got to wondering
why this touchy-feely '90s kind of company
was doing all this without even
consulting the people working there."

Carr signed up 13 of the 15 employees at
her Cambie Street store. Three other
stores on Howe and Davie Streets and in the
Royal Centre joined up. Then things
began to stall. As the union drive continued
through September, it became clear
that by no means all, or even the majority,
of Starbucks staff were heeding the
union call. An attempt at the older of the
two Robson Street stores failed to
garner the 55 per cent of employee support
required under B.C. law. Out at the
Deep Cove store the union drive foundered
after a number of employees who had
initially signed union cards sent letters
to the BC Labor Relations Board
retracting their CAW membership. When the
certification drive came to a halt in
October, only 110 employees in eight of 92
B.C. stores (and one pastry
distribution centre) had been CAW-certified.

Why the drive stalled is still unclean The
CAW's head office in Toronto is
reportedly still receiving calls from interested
workers. Bonang believes
intimidation by Starbucks stalled the drive.
A spokesman for Starbucks, on the
other hand, suggested the drive smiled because
workers at other stores are
entirely content with their current situation.
Neither explanation seems
entirely satisfactory. Likely, prospective
union members are waiting for the
outcome of the current round of collective
bargaining before they decide what
their next move should be.

The bargaining session to negotiate a first
contract was convened in October
'96. Starbucks hired an experienced negotiator,
Doug Quinn of Quinn, Martin,
Gallagher Consultants, to represent its interests
at the bargaining table. The
employees were represented by veteran CAW
negotiator Roger Crowther, along with
a bargaining committee made up of one Starbucks
employee from each of the union
stores.

Crowther's opening proposal was a contract
copied almost intact from the one
negotiated for the CAW's 500 unionized Kentucky
Fried Chicken workers. Demands
included a rise in the starting wage from
$7/hour to $10/hour, shift scheduling
based on seniority, paid sick leave for all
employees, a clothing allowance and
what Laurie Bonang calls "the rights and
dignity stuff' - essentially an end to
workplace harassment.

Starbucks didn't respond. No counter offer
was made on money, nor on
scheduling, nor sick leave, nor the 'rights
stuff'. "They're the least prepared
company I've dealt with in 20 years of bargaining,"
said Crowther early on in
the negotiations. "It's like they're still
in a state of shock."

That, or Starbucks was stalling. The company
itself won't comment in any
meaningful way on the negotiations. Repeated
calls to Starbucks marketing
director Launi Skinner, human resources VP
Shelley Silbernagel, VP Roly Morris,
and negotiator Doug Quinn were not returned.
Mat Wilcox - from the outside PR
company Barr and Wilcox Group - did call
back, but only to say, "It always takes
a long time to work out a first contract."
Stalling, however, is one of the
classic strategies when dealing with a new
and potentially weak union. The idea
is to hedge and prevaricate until everyone
is tired and the main organizers have
quit for other jobs, or simply given up.

November and December passed and the new
year began with no substantial
counter offer and only sporadic negotiations
on minor issues like the size and
prominence of union bulletin boards in the
company staff rooms. Attrition began
to take a toll. Steven Emery fled for a job
in Whistler and another of Bonang's
co-workers landed a career-oriented job and
left for better opportunities.

To speed things along, on March 27 the CAW
called for a strike vote, nearly
six months after bargaining began. Not surprisingly,
it passed with a margin of
92 per cent.

Starbucks hit back with the clearest possible
indication that, far from being
paralyzed with shock, it was more than interested
in a bit of hardball. The
company announced it would be closing the
pastry distribution centre, putting
nine newly unionized workers permanently
out of work. B.C. labor law prohibits a
company from closing down a workplace because
it has been unionized.

Starbucks, however, claimed the four-year-old
pastry centre had only been an
experiment, which had now been found to be
uneconomical. Its closure thus had
nothing to do with the union drive. It was
a claim few outside the boardroom
actually believed.

The CAW lodged a complaint with the Labour
Relations Board that the company
was bargaining in bad faith and filed strike
notice effective May 14. Neither
move pried anything further out of the company,
so early on May 16 pastry centre
workers hit the streets. Baristas at other
Starbucks locations began the first
of a series of job actions by wearing jeans,
T-shirts and union buttons in place
of the standard uniform of khaki Gap pants
and crisp white dress shirts. Union
members outside the eight unionized shops
explained the union viewpoint to
passersby, asking them to call Starbucks
to express their concern. The next step
is to leaflet other stores, followed by a
full-fledged strike or lockout.

How long the job action will last is tough
to predict as of writing in
mid-May. Even on the first day, the CAW baristas
are giving every. indication
that they don't really expect to get a three
buck raise right off the bat.
"We're not going to get the gravy on a first
contract," says Bonang, handing out
leaflets on the sidewalk. "Right now I'd
settle for just about anything." Nor do
most baristas have the kind of financial
depth necessary to last out a long
march on the picket lines. On the other hand,
they have little to lose by
staying out. CAW strike pay is abysmally
low - $125 for the first two weeks,
$175 after that - but it's not that much
lower than the approximately $250 a
week pulled in by a starting barista.

For its part, Starbucks has little incentive
to settle quickly. Eight stores
aren't enough to seriously jeopardize its
B.C. sales, no matter how long they
remain closed, whereas giving in would practically
ensure that every store in
the province went union. That's something
the company obviously doesn't want,
and other food service companies fear. According
to Mark von Schellwitz of the
Canadian Restaurant and Foodservices Association,
"Starbucks already has one of
the most generous benefits packages in the
industry. If the CAW can use that as
a standard to unionize . . . they can then
can go around using the Starbucks
collective agreement as something to show
to other workers."

The only real danger to Starbucks in shrugging
off the strikers is that it
may critically damage the most precious thing
a service company possesses: its
public image. Public reaction will thus be
critical. If Starbucks has wagered
correctly, the man in the street will look
at the issue and decide that $7 an
hour is plenty for brewing coffee. Certainly
at the Homby Street location, quite
a few customers were wandering in as usual,
ignoring Bonang and her bright-green
union pamphlets.

A sizable number, however, were stopping
to lend a word of encouragement. One
man in a light summer suit stopped to deliver
a 10-minute narrative on how; even
though he disliked unions, Starbucks had
lost his support after it refused to
donate any money to a charity supported by
his Lions Club branch. Given all the
money it was making, he continued, it could
certainly do more the community,
including maybe paying its workers 10 bucks
an hour. If this reaction is any
indication, the dispute may end up costing
Starbucks more in damage to its image
than it ever could in lost latte sales.

The dispute has already put paid to one bit
of Starbucks PR: the notion that
Starbucks is a daring 'new economy' innovator
with a cooperative new labor
relations paradigm. Starbucks is a company.
Lofty rhetoric aside, it exists to
make money. It has employees. Euphemisms
aside, some are managers, and some are
workers. East is east and west is west, and
though at times the twain shall
meet, it is likely to be but every few years,
and that over contract
negotiations at the collective bargaining
table.

They're Coming!

Starbucks is not the only service-sector
company being targeted for
organizations. The following is a sample
of the service sector companies
unionized in the past several months.

NAME: The Whistler Question newspaper, Whistler

UNION: International Brotherhood of Electrical
Workers, Local 213

EMPLOYEES: 20 (approx)

DATE CERTIFIED: pending approval of the B.C.
Labour Relations Board

NAME: Saan Stores Ltd., Squamish

UNION: United Food and Commercial Workers,
Local 2000

EMPLOYEES: 8

DATE CERTIFIED: 11/12/96

NAME: Elephant and Castle Group, Vancouver

UNION: CAW Local 3000

EMPLOYEES: 52

DATE CERTIFIED: 1/22/97

NAME: Canadian Tire, Kamloops

UNION: United Steelworkers of America, local
700

EMPLOYEES: 27

DATE CERTIFIED: 2/18/97

NAME: Rogers Video, Abbotsford

UNION: International Brotherhood of Electrical
Workers, Local 213

EMPLOYEES: 19

DATE CERTIFIED: 11/13/96

NAME: Lenscrafters International Ltd.

UNION: United Steelworkers of America, local
2952

EMPLOYEES: 14

DATE CERTIFIED: 2/18/97

NAME: Beauty Club, Vancouver

UNION: United Food and Commercial Workers,
Local 120B

EMPLOYEES: 13

DATE CERTIFIED: 2/12/97

NAME: Tri-City Bingo Palace, Surrey

UNION: International Brotherhood of Electrical
Workers, Local 213

EMPLOYEES: 22

DATE CERTIFIED: 11/20/96

Shawn Blore is a Vancouver freelance writer
and regular contributor to
BCBusiness.